SINGAPORE – The application period for participation in a simplified process that is meant to help micro and small companies here restructure their debts or wind up their business has been extended by 18 months.
The Simplified Insolvency Programme (SIP) will be open for application until Jan 28, 2024, the Ministry of Law (MinLaw) announced on Thursday (July 28).
This is the final extension of the application period for the programme, which was introduced in January 2021 in response to concerns that smaller businesses would be hardest hit amid the Covid-19 pandemic.
The initial application period was for six months and was later extended by 12 months to July 28, 2022.
Micro and small companies account for about 95 per cent of enterprises in Singapore.
In its statement, MinLaw noted that the business environment continues to be challenging even as Singapore progresses towards living with Covid-19, due to various geopolitical events and the persistently uncertain global economic outlook.
“The resulting economic headwinds from rising inflation, rising interest rates and supply chain disruptions continue to place pressure on micro and small companies that are still in their initial stages of recovery after the gradual reopening of the borders on April 1, 2022,” the ministry said.
The SIP comprises two separate programmes for which businesses can apply to: The Simplified Debt Restructuring Programme for the restructuring of debts and the potential rehabilitation of viable businesses, and the Simplified Winding Up Programme for the orderly winding up of non-viable businesses.
The final extension will allow financially distressed firms that are eligible for the programme to continue applying to the SIP till Jan 28, 2024.
If accepted, such companies and their stakeholders will benefit from simpler, faster and lower-cost debt restructuring and insolvency processes, which seek to optimise resources and potentially maximise returns to creditors.
Mr Kurt Wee, president of the Association of Small and Medium Enterprises, said that the extension reflects the challenging environment businesses face amid global volatility on multiple fronts.
“Given the continued difficult landscape… (with) numerous factors continuing to impact businesses negatively, this will be helpful in allowing companies that are no longer viable to have an easier process of winding up,” he said.
Companies that wish to apply for the programme may visit this website.